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Australia imposes flood tax

Thursday, Jan 27, 2011 - 02:18

Jan 27 - Australia introduces flood levy to help pay for rebuilding, says reconstruction will take A$5.6 billion off federal budget; also delays infrastructure projects for as long as three years. Arnold Gay reports.

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ABC AUSTRALIA - NO ACCESS AUSTRALIA / .COM.AU INTERNET SITES / ANY INTERNET SITE OF ANY AUSTRALIAN BASED MEDIA ORGANISATIONS OR MOBILE PLATFORMS / AUSTRALIAN NVO CLIENTS / SMH.COM.AU / NEWS.COM.AU NETWORK NINE - NO ACCESS AUSTRALIA / NEW ZEALAND / PAPUA NEW GUINEA / AUSTRALIA, NEW ZEALAND, PAPUA NEW GUINEA-BASED INTERNET SITES, MOBILE PLATFORMS OR SITES OF MEDIA ORGANIZATIONS BASED IN THOSE COUNTRIES, NVO CLIENTS/ SMH.COM.AU/NEWS.COM.AU/ABC AUSTRALIA - NO ACCESS AUSTRALIA / .COM.AU INTERNET SITES / ANY INTERNET SITE OF ANY AUSTRALIAN BASED MEDIA ORGANISATIONS OR MOBILE PLATFORMS / AUSTRALIAN NVO CLIENTS / SMH.COM.AU / NEWS.COM.AU (SOUNDBITE) (English) AUSTRALIAN PRIME MINISTER JULIA GILLARD SAYING: "Australians see what needs to be done, and they're doing it. It's no different for the government. I see what needs to be done, and I will do it. We will rebuild." For the Australian prime minister Julia Gillard, that means a $5.6 billion flood rebuilding package that includes a one-off levy on personal income. Speaking at the National Press Club, Gillard says the value of the package represents earliest estimates of what the floods will cost the Australian government. For the economy, the toll is also heavy. (SOUNDBITE) (English) AUSTRALIAN PRIME MINISTER JULIA GILLARD SAYING: "Treasury's preliminary estimates are that GDP growth in this financial year will be about a half a percentage point less, due to the floods." But Gillard said the strong Australian economy provides the ability to fund rebuilding without resorting to borrowing or going into deficit. She also noted capacity constraints given low unemployment amid a mining boom. (SOUNDBITE) (English) AUSTRALIAN PRIME MINISTER JULIA GILLARD SAYING: "we should leave the task of finding the money until future years" "Simply spending to rebuild without addressing the balance between supply and demand in the economy as a whole is not an option. That would only drive up the cost of skilled labour and the cost of building materials, and other economic inputs. Reduce value for money in the rebuilding itself; rob our mining industry and other economic sectors of the skills and the material they need, and ultimately spill over into higher inflation and higher interest rates." The new levy takes effect on July 1st, but will exempt lower earners and flood affected residents. Under the plan, Australians earning between A$50K and A$100,000 will pay 0.5 percent as a flood levy while those earning more than A$100K will pay one percent. It's expected to add A$1.8 billion to federal coffers. Canberra's package also calls for delays in a number of infrastructure projects in Queensland and other states for as long as three years, to cut spending and free up skilled labour for rebuilding efforts. Arnold Gay, Reuters

Australia imposes flood tax

Thursday, Jan 27, 2011 - 02:18

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